USD/MXN rises to six-day highs above 20.70

• The dollar with mixed results, rises against most emerging market currencies.
• USD/MXN heading for the highest daily close since the end of January.
• Stock markets recover modestly, but caution remains.

USD/MXN is rising for the second day in a row on Wednesday, fueled by caution prevailing across financial markets, and some dollar strength overall. The pair reached as high as 20.76, reaching the highest level in almost a week, before pulling back to the 20.70 area, where it is trading ahead of the formal opening of Wall Street.

The USD/MXN trend remains higher, and a confirmation above 20.70 would pave the way for a test of the 20.85/90 zone., the last defense for 21.00. In case the Mexican peso manages to keep the dollar below 20.70, it could favor a consolidation between 20.70 and 20.35 (with an intermediate level at 20.50).

Powell, data, oil and Ukraine

In the US, the ADP employment report showed figures above expectations on the labor market in February, and in turn a large positive revision of the January numbers. The data boosted the dollar slightly in the market.

Then the initial testimony was known that Jerome Powell, the president of the Federal Reserve will give before a committee of Congress. He explained that the central bank is on track to raise interest rates when the FOMC meets in two weeks and said it is too early to assess the impact of the Ukraine invasion on the economy. Later in the day he will answer questions from lawmakers. He will return again on Thursday.

Wall Street futures rise modestly. The peculiarity of the day is given by the rally in the price of oil, which is operating at a maximum since 2013. The sanctions against Russia and the refusal of operators to buy Russian oil are supporting crude oil prices.

Technical levels